Purpose of Journal Entry
The Journal entry is the first step of accounting cycle. The journal entry provide bases for classification. it is possible to classify without journal entry but it requires deep knowledge and experience. The direct classification does not provide us a sequential control of transaction. The surety that all transaction have been recorded in books of account can only be traced from Journal entry.
The journal entry also enables management for fast tracking of voucher. The journal entry is basically entered in chronological order therefore management can easily directly go to the relevant section. The journal entry is the foundation of whole accounting system . The Journal entry can be broadly classified into two categories i.e entries involve cash and entries does not involve cash. This is very important classification for filing structure of the organization.
The books contains the Journal entry is know as Journal . The entries are recorded in the journal date wise . The organization may opt for maintain some special journals when the volume of transaction in a specific head is larger. The examples of special Journal include the Sales Journal and Purchase Journal.
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